4TYPE OF FEASIBILITY ANALYSIS Feasibility analysis The feasibility of a project can be ascertained in terms of technical factors economic factors, or both. A feasibility study is documented with a report showing all the ramification of the project. Technical Feasibility. Technical feasibility refers to the ability of the process to take advantage of the current state of the technology in pursuing further improvement. The technical capability of the personnel as well as the capability of the available technology should be considered. Managerial Feasibility. Managerial feasibility involves the capability of the infrastructure of a process to achieve and sustain process improvement. Management support, employee involvement, and commitment are key element required to ascertain managerial feasibility. Economic Feasibility. This involves the feasibility of the proposed project to generate economic benefits. A benefit – cost analysis and a breakeven analysis are important aspects of evaluating the economic feasibility of new industrial projects. The tangible and intangible aspects of a projects should be translated into economic terms to facilitate a consistent basis for evaluation.

5Financial FeasibilityFinancial Feasibility. Financial feasibility should be distinguished from economic feasibility. Financial feasibility involves the capability of the project organization to raise the appropriate funds needed to implement the proposed project. Project financing can be a mayor obstacle in large multiparty project because of the level of capital required. loan availability, credit worthiness, equity, and loan schedule are important aspects of financial feasibility analysis. Cultural Feasibility. Cultural feasibility deals with the compatibility of the proposed project with the cultural setup of the project environment. In labour intensive project, planned function must be integrated with the local cultural practices and beliefs. For example, religious beliefs may influence what an individual is willing to do or not do.

6Social Feasibility. Social feasibility addresses the influences that a proposed project may have on the social system in the project environment. The ambient social structure may be such that certain categories of workers may be in short supply or nonexistent. The effect of the project on the social status of the project participants must be assessed to ensure compatibility. it should be recognized that workers in certain industries may have certain status symbols within the society. Safety Feasibility. Safety feasibility is another important aspect that should be considered in project planning. Safety feasibility refers to an analysis of whether the project is capable of being implemented and operated safely with minimal adverse effects on the environment. Unfortunately, environmental impact assessment is often not adequately addresses in complex project. As an example, the North America Free Trade Agreement (NAFTA) between the U.S. Canada, and Mexico was temporarily suspended in 1993 because of the legal consideration of the potential environmental impacts of the project to be undertaken under the agreement.

7Political FeasibilityPolitical Feasibility. A politically feasible may be referred to as a “ politically correct project “. Political consideration often dictate the direction for a proposed project. This is particularly true for large projects with national visibility that may have significant government inputs and political implications. For example, political necessity may be a source of support for a project regardless of the project’s merits. On the other hand, worthy project may face insurmountable opposition simply because of political factors. Political feasibility analysis requires an evaluation of the compatibility of project goals with the prevailing goals of the political system.

8SCOPE OF FEASIBILITY ANALYSIS Scope of Feasibility AnalysisSCOPE OF FEASIBILITY ANALYSIS Scope of Feasibility Analysis. In general terms, the element of a feasibility analysis for a project should cover the following items : 1.Need Analysis. This indicates a recognition of a need for the project. The need may affect the organization itself, another organization, the public, or the government. A preliminary study is then conducted to confirm and evaluate the need. A proposal of how the need may be satisfied is then made. pertinent questions that should be asked include : Is the need significant enough to justify the proposed project ? Will the need still exist by the time the project is completed ? What are the alternate means of satisfying the need ? What are the economic. social, environmental, and political impacts of the need ?

92. Process Work. This is the preliminary analysis done determine what will be required to satisfy the need. The work may be performed by a consultant who is an expert in the project field. The preliminary study often involves system models or prototypes. For technology – oriented project, artist’s conception and scaled – down models may be used for illustrating the general characteristics of a process. A simulation of the proposed system can be carried out to predict the outcome before the actual project starts Engineering and Design. This involves a detailed study of the proposed project. Written quotations are obtained from suppliers and subcontractors as needed. Technology capabilities are evaluated as needed. Product design, if needed, should be done at this stage.

104. Cost Estimate. This involves estimating project cost to an acceptable level of accuracy. Levels of around – 5% to + 15% are common at this level of a project plan. Both the initial and operating costs are included in the cost estimation. Estimates of capital investment and of recurring and nonrecurring costs should also be contained in the cost estimate document. Sensitivity analysis can be carried out on the estimated cost values to see how sensitive the project plan is to the estimated cost values. 5. Financial Analysis. This involves an analysis of the cash flow profile of the project. The analysis should consider rates of return, inflation, sources of capital, payback periods, breakeven point, residual values, and sensitivity. This is a capital analysis since it determines whether or not and when funds will be available to the project. The project cash flow profile helps to support the economic and financial feasibility of the project. The project cash flow profile helps to support the economic and financial feasibility of the project.

116. Project Impacts. This portion of the feasibility study provides an assessment of the impact of the proposed project. Environmental, social, cultural, political, and economic impacts may be some of the factors that will determine how a project is perceived by the public. The value added potential of the project should also be assessed. A value added tax may be assessed based on the price of product and the cost of the raw material used in making the product. The tax so collected may be viewed as a contribution to government coffers. 7.Conclusions and Recommendations. The feasibility study should end with the overall outcome of the project analysis. This may indicate an endorsement or disapproval of the project. Recommendations on what should be done should be include in this section of the feasibility study report.

12Stages of FS : Market Study :A study of the market variables which influences the supply of and demand for real estate ( this is broadest possible form of analysis and it encompasses all other of demand oriented real estate studies ) Marketability Study : A narrowly defined study to determine the conditions under which a specific property can be sold. The key conclusions relate to both price and time required to sell. A Feasibility Study : A study to determine the probability that a specific real estate proposal will meet the objectives of the developer and or investor. Highest and Best uses study : A study to determine that use among other possible and legal alternatives uses which result in the higher land value for a specific site.